16 August 2006 | Paul Snell

Britain should follow the US and French model to drive innovation through procurement, the Conservative Party claimed this week.

A progress report from the party's science, technology, engineering and mathematics task force found competition is the key to driving innovation, instead of providing grants to firms to come up with ideas.

Ian Taylor MP, chairman of the task force, said the government currently provides "input" support for innovation - putting money into established projects to help them succeed. It proposed moving to "output" support, where the government sets the market a specific challenge and buys the best solution. This model is already used in the US and France.

The task force said that if government departments placed large orders for particular requests, such as electricity-free fridges, venture capitalists would be more likely to invest in companies that are developing the products. If the company failed, it would be the venture capitalists who lost money, not the government, it concluded.

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